Preventing Employee Theft at Mogel’s Inc

This paper presents a list of improvements for Mogel’s Inc. that can assist in prevention of fraudulent activities. This comes after Mr. Stefan Winkler who was the director of accounting at Mogel’s Inc. (Beverage Company) swindled the company cash affecting the entire operations in the company. However, there are various improvement steps, which the company management should consider in order to prevent similar incidents from happening.

  1. The company should apply checks and balances system to ensure that no single officer controls all sections of financial transactions (Pedneault, 2010). This implies that there should be a designated officer at Mogel’s Inc. to coordinate and oversee all payments from route and credit customers. The designated officer at the company should, also, endorse all checks coming in by mail and list them before making deposits.
  2. The company should prioritize protection of all collections of cash and checks (Pedneault, 2010). In this regard the company should ensure that the concerned accounting officials bank the collected cash and checks in a prompt manner. Besides, this banking should happen in the original form they received them. The company should also issue a bank account number for credit customers to make direct deposits instead of sending checks by mail. After the deposits, credit customers can take the deposit receipts to the company for reconciliation purposes.
  3. The company should protect the collected checks against fraudulent use (Pedneault, 2010). In a situation where the company does not have a bank account number for credit customers to make their deposits as the situation is at Mogel’s Inc., checks should be handled with more than one person. Mails sent from credit customers should be received and recorded at the reception before being forwarded to the cashier who should enter their details into the company system before sending them to director of accounting for verification and filing.
  4. The company should reconcile its bank accounts on a monthly basis (Pedneault, 2010). Mogel;s Inc. should contract an independent person to complete such reconciliations every month. This should be a person who does not have responsibilities such as signing checks or bookkeeping at the company.
  5. The company should have a board of directors, which should be issued with oversight of general management and operations (Pedneault, 2010). The board should take charge of managing the financial activities at Mogel’s Inc. regularly. The board should, also, demand for explanations in case of any suspected and/or confirmed financial irregularity.
  6. The overall management at the main office in Delaware should consider reviewing payment schedules for credit customers to make it similar for all of them. Varying payment schedules for different customers may confuse the records especially when it comes to reconciliation of financial transactions (Pedneault, 2010).
  7. The management at Mogel’s Inc. should know all its employees well. This is because perpetrators of fraud like Stefan Winkler would often depict certain indications that would point to their intentions or plans to engage in fraudulent actions (Pedneault, 2010). Therefore, the company management should observe and listen to its employees because it is necessary.
  8. The company should practice implementation of controls (Pedneault, 2010). This implies that Mogel’s Inc. should have a reliable system of safeguarding its financial assets. The system should advance integrity regarding the accounting records and be able to detect any activities of theft.
  9. Mogel’s Inc. should hire experts to assist in creating antifraud procedures and policies (Pedneault, 2010). Such experts include Certified Public Accountants (CPA); Certified Fraud Examiners (CFE); and accountants Certified in Financial Forensics (CFF) (Pedneault, 2010).
  10. The company should establish a reporting system or make all employees aware (Pedneault, 2010). Every employee in the company should take note of the policy and the consequences that may follow in case any one of them is implicated. This awareness will make employees who have plans to swindle funds to know that management has eyes on them.

In conclusion, if Mogel’s Inc. and the main company in Delaware choose to implement the above listed improvements, it will be able to manage and prevent fraudulent actions in all its financial dealings.


Pedneault, S. (2010). Preventing and detecting employee theft and embezzlement: a practical         guide. New York: Wiley Publishers.

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